China's Three Gorges rules out new domestic hydro projects

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BEIJING/SHANGHAI, Jan 9 (Reuters) - China Three Gorges Corp (CTGC), operator of the world’s largest hydropower plant, is turning to projects offshore, a senior official said, as domestic costs soar and space runs out on the country’s crowded rivers.

“We don’t have any plans to build more hydropower projects in China but will develop more projects overseas,” said Sun Zhiyu, the company’s vice-president, on the sidelines of a meeting on Tuesday.

“We already have business in more than 40 countries, and will focus mostly on South Asia, Southeast Asia, Africa and Latin America,” he added.

The 22.5-gigawatt (GW) Three Gorges Project on the Yangtze river was completed in 2012 after a dam-building boom throughout China. Its turbines generate 100 billion kilowatt-hours of electricity per year.

CTGC, parent of listed China Yangtze Power Corp, has since completed other giant dams on the Yangtze upstream and its total hydropower generation capacity - including projects under construction - stands at nearly 70 GW, more than the total power capacity of Australia.

China’s total hydropower capacity hit 350 GW last year, accounting for a fifth of total generation, but its reliance on large and disruptive dam projects has been controversial.

Advocacy groups claim capacity could safely be doubled, but the government has slowed down hydro approvals amid concerns about its devastating impact on communities and ecosystems.

While hydropower produces no emissions during generation, opponents say it contributes to global warming by submerging forest and plant life under water. Giant dams and reservoirs also cause biodiversity loss and put quake-prone regions like Sichuan under greater seismic pressure.

Worried about potential unrest, China has sought to improve the way “hydropower migrants” are compensated. Payments to displaced residents now account for half of a project’s total costs, and tougher rules are set to be implemented next year.

China has also cracked down on small hydropower, said to have caused untold damage to aquatic ecosystems throughout the country.

However, industry advocates said at an industry meeting in Beijing on Tuesday that hydropower must still play a vital role in China’s clean energy goals.

Wang Yinan, researcher with the Development and Research Center, a cabinet think tank, said new rules had raised costs and eroded investment incentives, and transmission capacity was also insufficient.

“Fake environment protection ideas and ignorant ecological views are flooding society and demonising hydroelectric projects, which will mislead national policies, national security and ecological protection, “ she said.